Geographical Indications Laws in Indonesia in 2001: An Opportunity Lost in 1999

The Toraja Coffee Case

Indonesia is a large territory constituting of many islands. In each of these islands, several unique products of certain origin have been recognized due to its geographical origin or ethnic influences.

Normally, products namely coffee or cocoa originating from Indonesia could be related to names or marks alike Java or Bali indicating its origin from its regions of Jawa or the Bali. Many other unique products from specific origins in Indonesia have been recognized through marks containing geographical indications such as Toraja coffee, Java cocoa, Bali vanilla, and Banda nutmeg.

Geographical Indications (GI) protection plays an important role in providing the associated branding image to consumers seeking products originating from specific regions or locality. In Indonesia, protection of GI is set out under Marks Law No. 15 of 2001, which is in also compliance with the International TRIPs standards.

Toraja Coffee is world acclaimed specialty coffee. Belonging to the Arabica group of coffee seeds, it is mainly grown in Tana Toraja or Toraja land, a mountainous region located in the central of Sulawesi Island, and is inhibited mostly by ethnic Torajas, who possess special dialects and unique cultures alongside the tradition of growing Arabica coffee.

Historically, a Japanese company by the name of Kimura Coffee Co. Ltd. had introduced the Toraja Coffee brand in Japan in 1934. The Toraja Coffee was instantly recognised as having excellent harmonic tastes and appreciated as the best Arabica coffee with a distinct origin.

Thereafter, through a joint venture between Key Coffee Co. of Japan, and an Indonesian company in 1974, a new company was formed with the name PT Toarco Jaya, being the abbreviation of Toraja Arabica Coffee, with the mission to publicize and educate the masses on the reputable quality of Toraja coffee. PT Toarco Jaya todate manages one Arabica coffee plantation in Tana Toraja whilst buying high quality coffee beans from farmers in Tana Toraja.

Trade Mark Disputes

Key Coffee Co. along with Toshoku Ltd. had formally sought to register the trademark of Toraja (also written in Japanese letters) to the Agency of Patent Registration on 1974. The registration was formally announced early 1976 and was subsequently registered on 1977.

After its launch, the popularity of Toarco Toraja coffee significantly increased. However, since the first marketing of Toarco Toraja coffee in 1978, several imitation products using the Toraja mark emerged and were extensively marketed in Japan contrary to Key Coffee Co.’s registered rights over the Toraja mark. Key Coffee Co. endeavored to put several parties to notice that Key Coffee Co. owns exclusive rights to the Toraja mark, and issued the same when companies or shops were found using the mark and/or trading in coffee products using the “Toraja” marks.

By virtue of the increasing of popularity of Toraja coffee in Japan, other coffee cultivators and businesses questioned Key Coffee Co.’s monopoly of the Toraja mark as Toraja is a geographical region in Indonesia. Efforts were undertaken to seek Key Coffee Co. to permit others to use the Toraja mark on coffee products i.e. against Key Coffee Co.’s registered trademark rights, but due to the historical background of Toraja coffee development since 1934 through Kimura Coffee Co. Ltd., Key Coffee Co. did not allow for any unauthorized use of their registered trademark.

At the hiatus of this conflict, Key Coffee Co. initiated legal action against Avance Trading Co. in 1997 due to the unauthorized claim over the Toraja trademark. Avance Trading Co., without the permission of Key Coffee Co., went on to register a trademark consisting the derivation AVANCETORAJA with accompanying Japanese characters in 1992. The company claimed that ‘Toraja’ is a name of a geographical region and a noun”, and was therefore entitled to use the name legally.

After a protracted dispute, Key Coffee Co. and Avance Trading Co. finally agreed on three aspects as follows:

Avance Trading Co. had unconditionally admitted that “Toraja” is a trademark owned and registered to Key Coffee Co.;

Avance Trading Co. undertakes in using the derivation “Toraja” and be consistently aware of the high quality of the coffee beans that originate from Toraja in order to maintain its good image; and

Key Coffee Co. specifically permitted and authorized Avance Trading Co. to use the trademark “AVANCETORAJA” on their goods.

Key Coffee Co. has been in numerous legal disputes with other entities due to the misuse of the Toraja trademark, although such disputes ended in reconciliation between the parties.

Use of Toraja Trade Mark on Counterfeit Coffee Products

It has been reported that infringement of the Toraja mark using Arabica coffee beans from other origins was widespread amongst several coffee traders. In affect, due to lack of protection of the ‘Toraja’ mark over Arabica coffee beans, the quality of alleged “Toraja” coffee reaching the expectant members of the public was inconsistent and at times, very inferior to the original harvested coffee beans.

The lack of IP protection accorded to the Toraja mark due to the lack of legislation in 1999 for protection of GI marks had invariably led to many counterfeiting activities and infringement of coffee products that did not comply with the high standards that Toraja coffee beans historically stood out for. The aftermath of such led to it compromising its goodwill and worldwide reputation.

Thus, many the lessons can be learnt form the Toraja Case. For one, it advocates the significance of GI to producers and manufacturers which clearly augurs the fact that GIs are anchored to the particular country or region form which the products originate from, and as such contribute to its socio-economic development. And Indonesia is on track, in respect of this, as they have over the past few years implemented and exercised IP initiatives at international standards, once such initiative being the recognition of GI marks in 2001.

In addition, the awareness of GIs is of paramount importance to producers and foreign investment as taking into cognizance this factor would provide an allowance for unconditional dedication to the commercialization of traditional products in response to the increasing demands of quality conscious consumers.

More realistically, intellectual property protection with regard to GI is very important to such producers, manufacturers and foreign investors as well, not only in Indonesia, but worldwide, as they would need such means to market their products, which are easily differentiated and identifiable via the geographic origin.

Affording such measures would certainly afford legal shelter to designated products, which originate in a particular country or region, which possess unique characters due to their particular qualities and production methods.